Major US Financials Cracking: CDS Rerack

Tyler Durden's picture

As financial equities are underperforming so we are also seeing the major US banks widening in CDS land - closer and closer to record wides in the case of BofA and GS. Their credit curves are also inverting further as equity catches up to recent weakness.

BofA is almost at record wides from early October 2011 - well ahead of 2008/9. GS also looks close to recent peaks though still below previous peaks for now. Goldman is 160bps wider since the start of November!

JPM +6 to 179bps

BofA +17 to 456bps

GS +14 to 410bps

MS +10 to 516bps

WFC +3 to 175bps

C +13 to 315bps

Charts: Bloomberg

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GeneMarchbanks's picture

They're all hedged, it's cool.

MS especially. Also JPM is fine... bought CDS on itself just like GS.

johngaltfla's picture

LOL! Hedged with what? Greek CDS?

Dr. Richard Head's picture

Hedged with Collateralized Bernanke Beard Trimmings I believe. 

Hard1's picture

Bought CDS on themselves!!!ROFL!!!....brilliant, now they cannot even go bankrutpt without collecting a windfall to pay the last goodbye bonuses.

unununium's picture

The truth -- that they bought CDS on each other from each other -- is only slightly less ridiculous.

Buck Johnson's picture

No way my good man, no way.  They are hedged with Italian bonds which they insured with Spanish bonds which are backed by Harrisburg Pennsylvania municipality bonds with CDS.  Everything is safe and secure.

curbyourrisk's picture

To bad they were hedged through MF Global.

hedgeless_horseman's picture



But Dr. Bernanke just order more stress tests.  If we can't rely on the therapeutic value of diagnostics, then what can we rely on?

hedgeless_horseman's picture



Unfortunately, this shit is all to real.  Mark it zero, Dude.

iDealMeat's picture

Mark-to-Masturbation.  It's all a big circle jerk after all..

Amish Hacker's picture

The cleansing power of a full system reset?

hedgeless_horseman's picture



Just lie on your left side, Uncle Sam.

mayhem_korner's picture



Elbows on the table, Mr. Dimon...

fuu's picture

"Moooon Riiiiiiveeeeeeeer"

Jena's picture

Ice water?!?  Cold in more ways than one...

BennyBoy's picture

They are passing the FED stress test with flying colors.

Just look at their high scores in the above charts!

BW's picture

If they blow up they make money.

mayhem_korner's picture



Is it incest if these guys all underwrite each others CDS's? 

No one expects to get paid on these things in the imaginary event of default, right?

Dick Darlington's picture

Goldman is 160bps wider since the start of November!

Maaaaaa! Meatloaf and beer! Now! It's party time!

mayhem_korner's picture



It's beginning to look a lot like 2008, everywhere I go...

dcb's picture

14:30 weds pre thanks giving. we just hit my taget reentry point using speed lines

mayhem_korner's picture

my taget reentry point


A bit too Bawnie Fwank-ish sounding.  Just sayin'...

DogRockets's picture

Eat my shorts, a-hole. 

HD's picture

No bailout. Nationalize them for two years, then break them up into a half a dozen not TBTF banks.

The Axe's picture

I don't believe the volume, to me it feels like shorts pressing.... my humble opinion ....I nice buying opportunity.. market feels washed out.....just bot 10000 C  

hedgeless_horseman's picture me it feels like shorts pressing...

...just bot 10000 C

Feelings, nothing more than feelings,
Trying to forget my feelings of Bove.
Teardrops rolling down on my face,
Trying to forget my feelings of Bove.

Feelings, for all my life I'll feel it.
I wish I've never met you, Dick; I'll never be long again.

The Axe's picture

Now now is a gamble....  I hope to reap some rewards....Just my thoughts.... and my money....

scatterbrains's picture

It does feel like one of those inflection points.. would prefer to see C dip below the recent low intraday, then close higher while its RSI is all coiled up bullishly.  Also I noticed TLT is not being supported by RSI up here and suggests it's time to head lower.

GeneMarchbanks's picture

Axe & sb,

I commend your brave risk taking. I also commend your admitting it here on ZH. You're both brave. Or deranged. Best of luck.

hedgeless_horseman's picture



May 6, 2011 when BAC at $12.31

 "I don't see any reason why Bank of America is not going to double from the current price," Bove says.

Down -53% to date to $5.18  Missed it by that much.

GeneMarchbanks's picture

'just bot 10000 C'

I hope you're joking or you don't know what you're saying... for your sake.

lolmao500's picture


MFL8240's picture

Can you think of anything we can do to help implode GS and JPM?  I'm in.

Dingleberry's picture


gatorengineer's picture

The Squid is sick, should we take it to a vet?

mayhem_korner's picture



I like to imagine Chief Brody tossing Goldman chum off the back of the Orca.  :D

slaughterer's picture

Omitted by author  

slaughterer's picture

TBTF is now ready to die.  

holmes's picture

This just in from Dicked Bove:

You people are morons; buy B of A.


slaughterer's picture

And yet, no climax panic-selling in the equities of TBTF.  Just a slow, steady erosion.  

mayhem_korner's picture



Major awareness gap.  You've got CNBC reporting that Gold is tracking equities (guess they missed that one's up 20% for 2011 and the other is flat to down).  Truth and information still separated by a huge chasm.